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How and why do prices of identical products vary across countries?
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
2015 (English)Independent thesis Basic level (degree of Bachelor), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The validity of purchasing power parity and the law of one price have been constantly questioned as it is usually assumed that, at least in the long-run, commodity prices are perfectly arbitraged. The purpose of this paper is to investigate how and why do prices of identical goods vary across countries even today, in the globalized world, when trade costs are relatively low due to high mobility and the countless number of free-trade agreements. In order to fulfill the purpose of the study, prices of identical products from H&M are analyzed. The main factors taken into consideration when investigating the nature of price deviations are: tariffs, productivity, trade volume of clothing and how well the producing company is established within the sampled countries. The findings of the regression analysis indicate that price disparities exist and the law of one price, as well as purchasing power parity, fail to hold even when identical goods are compared.

Place, publisher, year, edition, pages
2015. , 37 p.
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-26851ISRN: JU-IHH-NAA-1-20150009OAI: oai:DiVA.org:hj-26851DiVA: diva2:815325
Subject / course
IHH, Economics
Supervisors
Examiners
Available from: 2015-06-09 Created: 2015-05-29 Last updated: 2015-06-09Bibliographically approved

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
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